Heritage Commerce Corp Reports Financial Results For Second Quarter 2010
SAN JOSE, Calif., July 22, 2010 (GLOBE NEWSWIRE) -- Heritage Commerce Corp (Nasdaq:HTBK), the holding company for Heritage Bank of Commerce, announced its financial results for the second quarter and six months ended June 30,2010.
"During the second quarter of 2010, we successfully executed several actions that strengthen our balance sheet, position us for a return to profitability more quickly, permit us to capitalize on the economic recovery in the Bay area and take advantage of opportunities to grow our franchise," said Walter Kaczmarek, President and Chief Executive Officer. "First, we raised $75 million of new equity capital to strengthen our capital and liquidity position, mitigate risk from a continued downturn in the economy, and provide additional capital to take advantage of opportunities that may be created by disruption in the market. Second, we identified $31.0 million of problem real estate related loans that the Company intends to sell in the third quarter. The transfer to held-for-sale resulted in $13.9 million of charge-offs in the second quarter of 2010. This action strengthens our balance sheet and positions our loan portfolio for increased profitability. In addition, the reduction in problem loans will help free up our loan officers to focus on growing our business."
Mr. Kaczmarek continued, "due to the continued downturn in the economy and the amount by which the Company's book value exceeded the market value per common share, we determined that our $43.2 million of goodwill was fully impaired. This one-time non-cash charge had no effect on the Company's or the Bank's cash balances, liquidity, or regulatory capital ratios. Also, after an analysis of both the positive and negative evidence regarding the realization of the deferred tax asset, we recorded a $3.7 million partial valuation allowance on the Company's deferred tax asset."As a result of the aforementioned actions, the Company had a net loss allocable to common shareholders of $55.1 million, or $(4.66) per diluted common share for the quarter ended June 30, 2010. On a net operating basis that excludes the non-cash goodwill impairment, the Company had a net operating loss allocable to common shareholders of $11.9 million, or $(1.01) per diluted common share for the quarter ended June 30, 2010.
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